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The U.S. is already bankrupt, according to the IMF [Copy link] 中文

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Post time 2010-8-12 10:38:13 |Display all floors
Last month, the International Monetary Fund released its annual review of U.S. economic policy. Its summary contained these bland words about U.S. fiscal policy: “Directors welcomed the authorities’ commitment to fiscal stabilization, but noted that a larger than budgeted adjustment would be required to stabilize debt-to-GDP.”

But delve deeper, and you will find that the IMF has effectively pronounced the U.S. bankrupt. Section 6 of the July 2010 Selected Issues Paper says: “The U.S. fiscal gap associated with today’s federal fiscal policy is huge for plausible discount rates.” It adds that “closing the fiscal gap requires a permanent annual fiscal adjustment equal to about 14 percent of U.S. GDP.”

The fiscal gap is the value today (the present value) of the difference between projected spending (including servicing official debt) and projected revenue in all future years.

.bloomberg.com

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Post time 2010-8-12 10:54:03 |Display all floors
To put 14 percent of gross domestic product in perspective, current federal revenue totals 14.9 percent of GDP. So the IMF is saying that closing the U.S. fiscal gap, from the revenue side, requires, roughly speaking, an immediate and permanent doubling of our personal-income, corporate and federal taxes as well as the payroll levy set down in the Federal Insurance Contribution Act.

Such a tax hike would leave the U.S. running a surplus equal to 5 percent of GDP this year, rather than a 9 percent deficit. So the IMF is really saying the U.S. needs to run a huge surplus now and for many years to come to pay for the spending that is scheduled. It’s also saying the longer the country waits to make tough fiscal adjustments, the more painful they will be.

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Post time 2010-8-12 10:54:49 |Display all floors
Is the IMF bonkers?

No. It has done its homework. So has the Congressional Budget Office whose Long-Term Budget Outlook, released in June, shows an even larger problem.

‘Unofficial’ Liabilities

Based on the CBO’s data, I calculate a fiscal gap of $202 trillion, which is more than 15 times the official debt. This gargantuan discrepancy between our “official” debt and our actual net indebtedness isn’t surprising. It reflects what economists call the labeling problem. Congress has been very careful over the years to label most of its liabilities “unofficial” to keep them off the books and far in the future.

For example, our Social Security FICA contributions are called taxes and our future Social Security benefits are called transfer payments. The government could equally well have labeled our contributions “loans” and called our future benefits “repayment of these loans less an old age tax,” with the old age tax making up for any difference between the benefits promised and principal plus interest on the contributions.

The fiscal gap isn’t affected by fiscal labeling. It’s the only theoretically correct measure of our long-run fiscal condition because it considers all spending, no matter how labeled, and incorporates long-term and short-term policy.

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Post time 2010-8-13 19:35:01 |Display all floors
so why should we trusted crooked organisations like the imf, and crooks like bloomberg?

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Post time 2011-1-14 20:10:52 |Display all floors
It is time for the US to give it up


and let the Islamic Nation rule the world


their idea of deceit and cowardice is a much brighter futre for the world
The Brotherhood of Knights of the Mystic Sea

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Post time 2011-1-14 20:12:58 |Display all floors

BEST SOLUTION

more people should strap on some bombs and go maim and kill Americans indiscriminately


Join the Islamic hate movement


support the OP and all his ghostly aliases!


YES



ALLAH AKBAR!
The Brotherhood of Knights of the Mystic Sea

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Post time 2011-1-14 20:14:49 |Display all floors
Time to give it up to the BANK of ISLAM!
The Brotherhood of Knights of the Mystic Sea

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